Santander set for a rebound after fall in profits

Thursday 25 April 2013 11:58 BST

Santander PA

Santander UK today said profits fell 22% in the first quarter but it also predicted a steadily improving environment for its business over the rest of the year, paving the way to a much delayed share sale by its Spanish parent in 2015.

“We continue our support of UK individuals, families and businesses and to act as a strong competitor on the High Street.”

Santander UK’s pre-tax profits fell 22% to £282 million in the three months to March largely reflecting a drop in net interest income of 12% to £692 million. UK banking chief Steve Pateman explained that this largely reflected the kind of interest rates the bank had to offer this time last year to attract savers.

He said: “Back then our e-save account was offering 3.2% while ISAs were being sold at an average rate of 4%.

“Today those rates are 1.25% and 2.5% respectively.

“As we move into the second and third quarter we will be comparing like-with-like and our net interest margin will improve.

“The first quarter is already better than the final quarter of last year.”

Parent bank Santander reported a 26% fall in after-tax profits at £1.2 billion, having been dragged down not just by the UK business but also by an 18% fall in Latin American earnings.